Chime Nearing New Funding Round at $5 Billion Valuation

(Bloomberg) -- Chime, an online banking startup with more than 5 million customers, is close to raising new funding from investors at a valuation that could be north of $5 billion, according to a person familiar with the matter. 

The funding round is slated to be led by DST Global, said the person, who asked not to be identified discussing private information. DST also led the company’s previous funding round that closed in March, which valued Chime at about $1.5 billion. DST has invested in a number of high-profile fintech startups including Robinhood Markets Inc., Brex Inc. and Stripe Inc. 

The details of the deal have not been finalized and could still change, the person said. Chime declined to comment.

San Francisco-based Chime is part of a digital banking sector that has seen a dramatic increase in interest from global investors in recent years. Berlin-based mobile bank N26 recently launched in the U.S. and raised a new funding round in July that valued it at $3.5 billion. U.K.-based Revolut Ltd., last valued at $1.7 billion, also opened up shop in the U.S. And in Brazil, DST-backed NuBank has raised almost $1 billion since its founding in 2013, and has a reported valuation of $10 billion.

Venture capitalists are looking to digital banks as an appealing option for millennials and new financial customers who primarily manage money using their phones, and who are looking for lower fees and more perks than are offered at traditional financial institutions. Rather than make money on overdraft fees or monthly charges, many online banks currently use interchange fees from debit and credit cards to generate a large chunk of their revenue.

Some details of Chime’s new funding round were previously reported by Axios. 

To contact the editor responsible for this story: Anne VanderMey at avandermey@bloomberg.net, Mark Milian

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